Two rogue board members stage takeover of Clackamas River Water District

A Clackamas County sheriff's deputy observes as board members Patricia Holloway (center), Grafton Sterling (right) meet at Clackamas River Water District headquarters. Observing is Warren Mitchell (left), a former board member.Molly Harbarger/The Oregonian

Two renegade board members staged a six-hour takeover of the Clackamas River Water District Tuesday, appointing two new board members, firing the district's attorney and placing the general manager on administrative leave. They also retained a board member's personal attorney to enforce the administrative leave, expecting the water district to pay his fees.

Clackamas County's top attorney and Clackamas River staff contest the actions by Patricia Holloway and Grafton Sterling, maintaining that it takes a quorum of the five-member board to call a legal public meeting. Holloway's personal attorney contended that a quorum is not required to appoint new members.

Either way, what unfolded was an unprecedented escalation in the fight to control the board. The Clackamas County commissioners plan to appoint three new members on Nov. 8, presumably leaving Holloway and Sterling in the minority.

As tensions escalated and subsided throughout the day, Clackamas County sheriff's deputies were summoned to the scene, with Holloway and Sterling asking for General Manager Lee Moore to be removed, and Moore seeking to expel the renegade board members.

Deputies declined to do either, and the participants remained in a standoff.

The board members ordered Hawaiian and veggie pizza and breadsticks while awaiting a resolution.

Dan Aguayo

The strange sequence of events began at 10 a.m., when Holloway and Sterling took their seats in the water district's Clackamas boardroom. They immediately appointed Jeff Monroy,a retired real estate manager from Oregon City, and former Clackamas County Commissioner Larry Sowa to the board. A notary public swore in Monroy. Sowa did not attend.

The three then unanimously voted to place General Manager Moore on administrative leave and to fire the district's attorney, Dean Phillips. They declined to explain either action.

Sterling signed a notice that had been drafted in advance and asked a security guard to deliver it to Moore, who was in his office upstairs.

"OK, that's fine," Moore said when he took the letter.

What they're debating

The law

ORS 198.320: Filling of vacancies on boards of certain districts

Except as otherwise provided by law, a vacancy in an elected office in the membership of the governing body of a district shall be filled by appointment by a majority of the remaining members of the governing body. If a majority of the membership of the governing body is vacant or if a majority cannot agree, the vacancies shall be filled promptly by the county court of the county in which the administrative office of the district is located.

Renegades' position:

– Board member Mike Cardwell resigned in July, and board member Kami Kehoe became disqualified to serve by allegedly moving out of the district. That leaves the board with three members, Barbara Kemper, Patricia Holloway and Grafton Sterling. Holloway and Sterling constitute a majority of the remaining three members, empowering them to fill vacancies.

– Once Holloway and Sterling appointed a fourth member, any three of them constituted a quorum that could take further action.

County counsel position:

– A quorum is required to call a public meeting. Action taken at a meeting called by less than a quorum is invalid.

– As of Tuesday, the Clackamas River Water Board had four members and one vacant position. Two members do not constitute a majority of the remaining four members. Although Kehoe's residency has been challenged, she remains on the board until she resigns or is removed.

Did he plan to honor the order? "Of course not," Moore said. "This is from the 'Holloway School of Law,'" Moore said. "This is really beyond the pale."

The board members ordered Moore to leave the building and then called the sheriff's office when he refused. Once it became clear that no one intended to leave, and that deputies saw no reason to intervene, the board members and their new appointee called an emergency meeting and convened an executive session.

They then returned to public session and appointed Holloway's personal attorney, James D. Huffman of St. Helens, as special counsel to the board.

"We needed to get things back on track," Holloway said Tuesday. "Things just kind of spun out of control, and the county just jumped in where they did not have a legal right to do that."

Monroy and Sterling declined to explain their actions.

Holloway, Sterling, Moore and Phillips have a contentious history, At a
Sept. 13 meeting, Sterling and Moore wrestled over an operations manual, a
dispute that also resulted in calls to the sheriff’s office.

Tuesday's developments complicate an already-confused situation on the board, which has one vacancy and resignations from two other members effective today.

Normally, the water district recruits and appoints new board members. However, a monthslong 2-2 voting deadlock has kept the members from appointing a tiebreaking fifth board member since Mike Cardwell resigned in July.

The matter then fell to Clackamas County commissioners, who plan to appoint three new board members at their Nov. 8 meeting. A county selection committee is scheduled on Thursday to interview 13 candidates for the two openings. The commissioners have also signaled their intent to appoint Sowa to fill Cardwell's position.

Monroy was one of the applicants, but said he won't attend the interview because he is already on the board. Former water district board member Warren Mitchell, who videotaped Tuesday's meeting also applied, and said he still might interview, depending on whether the county recognizes Holloway and Sterling's appointments.

The board is under growing pressure to get back on track – from ratepayers, county officials and the district's own insurance provider.

In September, the Special Districts Association of Oregon notified the water district that it would cancel the agency's property and liability insurance in January, saying it has a "fiduciary responsibility" to protect other members from costs and liability generated by the district's contentious and dysfunctional board.

The Clackamas River Water Board has struggled for years with infighting and dysfunction. In the past decade, the board has burned through six general and interim managers and, because of recurring accusations of mismanagement, submitted to three expensive special audits and a half-dozen ethics and workplace complaints. The district racked up about $1 million in legal fees in the past four years, mostly from infighting among board members.